‘Lone Eagle’ Cities: Where The Most People Work From Home

Appearing in:

Forbes

In an era of high unemployment and limited opportunity, more Americans are taking matters into their own hands and going to work for themselves out of their homes.

Normally small businesses have led the way during economic recoveries, but this time around they’re not creating many jobs. Instead much of the growth we are now seeing is in “lone eagle” businesses, to borrow a phrase from Phil Burgess, often operating out of the worker’s residence. This reverses the trend from 1960 to 1980, when there were steady reductions in the number of people who worked at home. Indeed, despite all the talk of increased mass transit usage, the percentage of Americans working at home has grown 1.5 times faster over the past decade; there are now more telecommuters than people who take mass transit to work in 38 out of the 52 U.S. metropolitan areas with more than 1,000,000 residents.

One clear driver of this trend is technology, particularly the growing ubiquity of high-speed Internet. A consultant in New York can now serve customers in Fargo, and vice versa, greatly expanding the range of places where people can live. This is particularly true for aging boomers, as well as younger workers having problems finding a full-time job in this tough economy.

Not surprisingly, of America’s 52 largest metro areas, the ones with the highest proportions of home-based workers are generally those with high-tech, information-based economies. Tops is San Diego, a major center for digital and biomedical businesses, where 6.6% of workers are based at home.

The next five metro areas, which have home worker concentrations ranging from 6.1% to 6.4%, all boast a high number of STEM workers and tech firms: Austin, Portland, Denver, Raleigh and San Francisco-Oakland. They all also have another thing in common: They tend to be popular destinations for millennials, who seem far more comfortable with unconventional work arrangements than older generations.

High real estate costs may be accelerating the trend in San Francisco, San Diego and Portland —  if office space isn’t affordable, why not stay at home? All are also plagued by traffic congestion, most notably the Bay Area, which has among the longest commute times in the country. Rather than drive down snarled freeways, or take slow mass transit, individuals may do better working from home and heading into the traffic maelstrom only when absolutely necessary.

College Towns, Suburbs And Exurbs

Many metro areas, of course, are huge, and have many different kinds of geographies. But when we looked at the percentage of home-based workers in all municipalities with populations above 25,000, two types dominated the top of the table: college towns and tech-oriented exurbs. Boulder, Colo., for example, has the third highest proportion of people who work at home, at 11.6%, almost three times the national average. Other college towns with large proportions of telecommuters and one-person businesses include Berkeley, Calf. (tied for fifth, 10.6%), and Columbia, S.C. (12th, 9.9%), home to the University of South Carolina.

But the bulk of our leading work-at-home locales are tech-oriented suburbs or exurbs. These include several communities around the often traffic-clogged greater Atlanta area, including No. 2 John’s Creek (13.1%) and No. 6 Alpharetta (10.6%).

There are even more in the sprawl of Southern California. As many  longtime Southland residents can attest, the best workday is one that does not involve either driving or taking transit. The top municipalities on our list in the region tend to be more affluent communities, including two suburbs of our top-ranked metro area, San Diego: Carlsbad (16th, 9.4%) and Encinitas (fourth, 10.7%).

The Codger Economy

Yet it would be a mistake to think cities with large home-based workforces are necessarily youthful ones. Nor are they all in large metropolitan areas. Although still slightly below the average for metropolitan areas, the pace of new telecommuter growth is now much faster outside the major metro areas.

More than 5 million Americans aged 55 or older run their own businesses or are otherwise self-employed, according to the Small Business Administration, and their numbers soared 52% from 2000 to 2007. As research from the Kauffmann Foundation suggests, many of these aging workers are not ready to hang up their workboots.

This entrepreneurial push could correlate with  the movement of aging boomers to more rural communities, and sleepier outer suburbs. Contrary to the much-hyped notion of a “back to the city” movement among boomers, Census research suggests that if they move at all, most head further to the periphery. At the top of our list of communities over 25,000 is the coastal North Carolina city of Jacksonville, home to the Marine Corps’ Camp Lejeune and a good number of military retirees. A remarkable 13.8% of the people in this highly affordable, scenic community of 70,000 work out of their homes, roughly three times the national average. The median home price in Jacksonville: $141,000.

Other retirement hot spots with high telecommuter shares include Boca Raton, Fla. (9.8%), Scottsdale, Ariz. (9.8%), and Bend, Ore. (9.0%). These communities tend to attract well-educated boomers, many of whom have kept their business connections and work as consultants. In many cases, telecommuting allows people to continue their careers, but in an atmosphere of comfort, without the burden of commuting and, in many cases, sans the high income taxes of places like California and New York.

We can expect the wired economy to expand to other smaller communities. Already numerous smaller towns in the Midwest, such as Albert Lea, an hour and a half from Minneapolis, Brainerd, Minn., and Hastings Neb., all have home worker shares well above the national average. Many of the areas with the fastest growth in the number of self-employed people, notes EMSI is in small, somewhat isolated communities.

Many analysts who follow these trends expect stay-at-home workers to become more common in the future. According to research by Kate Lister and Tom Harnish of the Telework Research Network, the typical teleworker is a 49-year-old, college-educated, salaried, non-union employee in a management or professional role, earning $58,000 a year at a company with more than 100 employees.

This suggests that, as more workers enter their 50s, the telework population will expand further.  These numbers will continue to be buttressed by both economic and social factors. The shift towards outsourcing by companies seems unlikely to slow in the years ahead, with more work going to subcontractors who can often work at home. At the same time more boomers, particularly those with skills and connections, will continue to move to places that offer more attractive lifestyles — a process that Joel Garreau has labeled “the Santa Fe-ization of the world,” which he links to people with enough money to have choices.

In the future, however, less well-heeled workers can also be expected to increasingly shift to affordable locales that appeal to them. This can be almost anywhere — a beach community, a rural hamlet, an exurb or even a dense urban location, as we can see by the geographic diversity in these rankings. As USC grad student Jeff Khau writes, this should encourage the development of wired coffee shops and casual restaurants in smaller communities and exurbs.

Finally, there are both familial and environmental reasons for this trend to expand. With more two-worker households, it has become more attractive to have at least one person working from home, part-time or full-time. And then there is the environmental desire to reduce carbon admissions. Compared to being forced to live in dense cities, or taking mass transit, the best way by far to reduce energy use – not to mention stress – is to not leave home at all.

Top Places Where Residents Work at Home

No. 1: Jacksonville, NC – 13.8%

No. 2. Johns Creek, GA – 13.1%

No. 3: Boulder, CO – 11.6%

No. 4: Encinitas, CA – 10.7%

No. 5 (tie): Berkeley, CA – 10.6%

No. 5 (tie): Alpharetta, GA -10.6%

No. 5 (tie): Santa Monica, CA -10.6%

No. 8: Frisco, TX – 10.2%

No. 9 (tie): San Clemente, CA – 10.1%

No. 9 (tie): Columbus, GA – 10.1%

No. 11: Bethesda CDP, MD – 10.0%

No. 12: Columbia, SC – 9.9%

No. 13 (tie): Boca Raton, FL – 9.8%

No. 13 (tie): Scottsdale, AZ – 9.8%

No. 15: Newport Beach, CA – 9.5%

Journey to Work Market Share by Mode (2012 ACS.1 & Year)
Total Drive Alone Car Pool Transit Cycle Walk Other @ Home
United States 100% 76.3% 9.7% 5.0% 0.6% 2.8% 1.2% 4.4%
Outside Major Metropolitan Areas 100% 79.9% 10.2% 1.2% 0.6% 2.8% 1.2% 4.1%
Major Metropolitan Areas (52) 100% 73.5% 9.3% 7.9% 0.7% 2.8% 1.2% 4.6%
Atlanta, GA 100% 78.0% 10.5% 2.9% 0.1% 1.4% 1.1% 5.9%
Austin, TX 100% 76.0% 11.0% 2.3% 0.9% 2.0% 1.4% 6.4%
Baltimore, MD 100% 76.5% 8.9% 6.5% 0.3% 2.7% 1.0% 4.1%
Birmingham, AL 100% 85.7% 9.1% 0.6% 0.1% 1.0% 0.5% 2.9%
Boston, MA-NH 100% 68.6% 7.5% 12.2% 1.0% 5.4% 1.0% 4.4%
Buffalo, NY 100% 82.9% 7.5% 3.0% 0.5% 2.9% 0.8% 2.3%
Charlotte, NC-SC 100% 78.8% 10.3% 2.1% 0.2% 1.6% 1.2% 5.9%
Chicago, IL-IN-WI 100% 70.9% 8.8% 11.1% 0.7% 3.2% 1.1% 4.2%
Cincinnati, OH-KY-IN 100% 83.5% 8.3% 1.8% 0.1% 2.0% 0.7% 3.5%
Cleveland, OH 100% 82.3% 7.4% 3.2% 0.3% 2.3% 0.9% 3.6%
Columbus, OH 100% 82.1% 8.4% 1.6% 0.5% 2.0% 1.1% 4.3%
Dallas-Fort Worth, TX 100% 80.9% 10.2% 1.5% 0.2% 1.2% 1.5% 4.6%
Denver, CO 100% 75.6% 9.1% 4.4% 1.1% 2.4% 1.1% 6.3%
Detroit,  MI 100% 83.7% 8.9% 1.6% 0.3% 1.3% 0.8% 3.4%
Grand Rapids, MI 100% 82.7% 9.2% 1.2% 0.5% 1.8% 0.6% 4.0%
Hartford, CT 100% 81.4% 7.6% 3.4% 0.2% 2.7% 0.9% 3.7%
Houston, TX 100% 79.6% 11.1% 2.6% 0.3% 1.4% 1.5% 3.5%
Indianapolis. IN 100% 82.6% 9.4% 1.2% 0.3% 1.6% 0.9% 4.0%
Jacksonville, FL 100% 80.7% 9.9% 1.3% 0.7% 1.3% 1.3% 4.7%
Kansas City, MO-KS 100% 83.2% 8.9% 1.1% 0.2% 1.3% 1.1% 4.2%
Las Vegas, NV 100% 78.5% 10.7% 3.8% 0.3% 2.0% 1.6% 2.9%
Los Angeles, CA 100% 74.1% 10.1% 6.0% 0.9% 2.6% 1.2% 5.1%
Louisville, KY-IN 100% 82.9% 9.3% 1.8% 0.2% 1.8% 0.8% 3.2%
Memphis, TN-MS-AR 100% 83.0% 10.5% 1.2% 0.1% 1.2% 0.9% 3.0%
Miami, FL 100% 77.6% 9.5% 4.2% 0.6% 1.8% 1.3% 5.0%
Milwaukee,WI 100% 80.2% 8.6% 3.7% 0.6% 2.9% 0.7% 3.2%
Minneapolis-St. Paul, MN-WI 100% 78.2% 8.6% 4.3% 1.0% 2.2% 0.7% 5.0%
Nashville, TN 100% 82.4% 9.6% 1.1% 0.1% 1.2% 1.0% 4.7%
New Orleans. LA 100% 79.2% 10.4% 2.7% 1.0% 2.5% 1.6% 2.6%
New York, NY-NJ-PA 100% 49.8% 6.7% 31.0% 0.6% 6.1% 1.6% 4.1%
Oklahoma City, OK 100% 82.9% 10.2% 0.4% 0.3% 1.7% 1.2% 3.3%
Orlando, FL 100% 80.8% 9.2% 2.0% 0.6% 1.2% 1.7% 4.6%
Philadelphia, PA-NJ-DE-MD 100% 73.3% 7.9% 9.4% 0.7% 3.8% 0.7% 4.2%
Phoenix, AZ 100% 77.3% 11.0% 2.1% 0.8% 1.4% 1.8% 5.6%
Pittsburgh, PA 100% 77.3% 9.0% 5.5% 0.3% 3.4% 0.9% 3.6%
Portland, OR-WA 100% 70.8% 9.7% 6.0% 2.3% 3.8% 1.0% 6.4%
Providence, RI-MA 100% 80.4% 8.8% 2.9% 0.3% 3.2% 1.1% 3.2%
Raleigh, NC 100% 80.3% 9.8% 1.0% 0.4% 1.1% 1.2% 6.2%
Richmond, VA 100% 81.5% 9.3% 1.6% 0.5% 1.5% 0.9% 4.7%
Riverside-San Bernardino, CA 100% 77.7% 13.4% 1.5% 0.4% 1.6% 1.0% 4.4%
Rochester, NY 100% 82.4% 7.9% 1.9% 0.3% 3.6% 0.7% 3.2%
Sacramento, CA 100% 75.5% 11.2% 2.3% 1.9% 2.2% 0.9% 6.0%
Salt Lake City, UT 100% 75.0% 12.1% 3.9% 0.9% 2.0% 1.3% 4.7%
San Antonio, TX 100% 79.7% 11.1% 2.3% 0.1% 1.7% 1.0% 4.1%
San Diego, CA 100% 76.2% 9.9% 2.8% 0.7% 2.7% 1.2% 6.6%
San Francisco-Oakland, CA 100% 60.4% 10.1% 15.6% 1.8% 4.3% 1.6% 6.1%
San Jose, CA 100% 76.5% 10.6% 3.4% 1.9% 1.6% 1.4% 4.6%
Seattle, WA 100% 69.6% 10.5% 8.5% 1.2% 3.6% 1.1% 5.5%
St. Louis,, MO-IL 100% 82.4% 8.1% 2.3% 0.3% 1.7% 0.9% 4.2%
Tampa-St. Petersburg, FL 100% 80.0% 9.6% 1.2% 0.8% 1.7% 1.3% 5.4%
Virginia Beach-Norfolk, VA-NC 100% 80.9% 8.9% 1.9% 0.4% 2.7% 0.9% 4.3%
Washington, DC-VA-MD-WV 100% 65.8% 10.2% 14.1% 0.8% 3.2% 0.9% 5.0%